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Armenian Government Body Hit By Corruption Scandal


Armenia - Davit Sanasarian, the head of the State Oversight Service, at a news conference in Yerevan, January 11, 2019.

Two senior officials from an Armenian government agency tasked with combatting financial irregularities in the public sector have been arrested on corruption charges denied by them.

The National Security Service (NSS) claimed on Thursday that they colluded with a private firm to “illegally interfere” in and personally benefit from government-funded supplies of medical equipment to three hospitals. It said a senior executive of “the company linked to them” was also remanded in pre-trial custody on Wednesday.

The indicted officials are Samvel Adian, the acting head of a State Oversight Service (SOS) division monitoring procurements, and his top aide, Gevorg Khachatrian. They were reportedly detained on Tuesday before being formally charged with forgery of documents and abuse of power resulting in “severe consequences.”

In a statement, the NSS said that Adian and Khachatrian arbitrarily forced the medical institutions to rig rules for the choice of companies supplying expensive equipment for hemodialysis, a treatment of kidney failure. It said they wanted to make sure that “the business entity sponsored by them” wins tenders for such supplies.

Armenia - Newly appointed Health Minister Arsen Torosian addresses his staff, May 15, 2018.
Armenia - Newly appointed Health Minister Arsen Torosian addresses his staff, May 15, 2018.

Speaking to RFE/RL’s Armenian service on Tuesday, Health Minister Arsen Torosian said he asked the NSS to investigate “external interference” in dialysis-related procurements because the new tender rules threatened to disrupt the vital medical services provided around a thousand patients across the country.

Arman Hovakimian, the chief executive of Yerevan’s Surb Grigor Lusavorich hospital, also deplored the new bidding specifications. He argued that suppliers are no longer required to maintain the dialysis equipment after delivering it.

“This has meant that we are now deprived of such maintenance,” Hovakimian told RFE/RL’s Armenian service.

The dialysis equipment tenders were until recently won by a handful of private firms. Earlier this week, one of their owners accused the SOS chief, Davit Sanasarian, of driving his Frezen company out of business.

Sanasarian dismissed the allegations, saying that his agency has simply broken up Frezen’s “monopoly” on supplies to Surb Grigor Lusavorich. He said that the company had for years enjoyed privileged treatment by relevant authorities.

Lawyers for the indicted SOS officials made the same claims when they said their clients strongly deny the accusations. Davit Mnatsakanian, who represents Adian, said the latter only sought to ensure “equal conditions for all companies” interested in winning the supply contracts.

Armenia - Davit Sanasarian (L), head of the State Oversight Service, and Artur Vanetsian (R), director of the Natonal Security Service, at a cabinet meeting in Yerevan, February 21, 2019.
Armenia - Davit Sanasarian (L), head of the State Oversight Service, and Artur Vanetsian (R), director of the Natonal Security Service, at a cabinet meeting in Yerevan, February 21, 2019.

Sanasarian defended Adian and the other arrested official on Thursday, saying that they are among the SOS’s “best and exemplary employees.” “Their guilt has to be proved,” he told reporters.

Sanasarian seemed unhappy with the NSS’s handling of the high-profile investigation. He said he has urged the security agency to “maintain the secrecy” of the probe and not leak its details to “manipulators.”

“We will continue to examine the hemodialysis market regardless of whether or not some people want it and whose interests are trampled underfoot here,” he added.

The official would not say whether he will resign if his subordinates are convicted.He only noted that the charges leveled against them “do not mean a serious corruption scandal.”

Sanasarian, 34, is a former opposition and civic activist who actively participated in last spring’s “velvet revolution” led by Nikol Pashinian, Armenia’s current prime minister. Pashinian named him to run the SOS shortly after coming to power in May.

Both Sanasarian and Health Minister Torosian are senior members of Pashinian’s My Step alliance.

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